I agree with you, tris06. LFL sales in retail, vet and NZ remain well above inflation, even with some shift from standalone vets to in-store vets. I can't remember any period where LFL growth was below inflation. This is despite fierce competition from the supermarkets, including Aldi, discount department stores, and on-line players such as Pet Circle. Their loyalty scheme is already locking in customers, and the new CEO has expertise in this area.
Once the accounting issues and one-off impacts are dealt with and in the past, capital expenditure is reduced to only high-returning investments such as in-store vets, and debt is being paid off out of profits (as you say by about 25% of profits), the share price should recover. The vast majority of companies in this situation recover well over 2-3 years.
GXL Price at posting:
$3.89 Sentiment: Buy Disclosure: Held
